Senate President: “We Need to Keep All of Our Options on the Table Right Now”
TRENTON – Senate President Richard J. Codey (D-Essex) today proposed seeking voter approval of a constitutional amendment to explore the opportunity of leasing the New Jersey Lottery to a private operator in order to maximize revenue potential and help address the state’s fiscal needs.
“I think we need to keep all of our financial options open at the moment,” said Sen. Codey. “If we can get the ball rolling on this now, and get it on the ballot in November, then at least we will have the legal means to explore this option in the future.”
New Jersey’s constitution dictates that the lottery be operated under state oversight and control with net proceeds going to support state institutions and state aid for education. In order to lease the operations to a private operator and use any additional proceeds for other means, both houses of the Legislature would have to approve a constitutional amendment, which would then have to be placed on the ballot as a referendum and approved by voters in a general election.
“The market may not be ideal for pursuing this opportunity at the moment. But if voters agree with us and approve the referendum, then at least it will be a viable option in the near future. We know when it comes to the economy, some times we only have a short window of opportunity to take advantage of favorable conditions.”
Sen. Codey stressed, that in the right economy, the lottery can be a valuable asset to tap into. In FY 2007, the lottery generated $2.3 billion in revenue, of which, the state received roughly $828 million. However, in the hands of a private operator with far greater marketing and programming resources, the lottery could be an even greater revenue generator, he said.
“There are a lot of ways to structure an agreement, under the right conditions, that would ensure the state continues to receive the funds it does for education and other institutions, while also benefiting from an additional infusion of money. I think we can reap billions up front, while still pulling in hundreds of millions each year and possibly negotiating a percentage of the additional profits that the operator will pull in. But to truly know the value of this asset we first need to make this change,” added Sen. Codey.
The Senate President said he intends to discuss the option further with his fellow lawmakers and could introduce a constitutional amendment in the Legislature this Spring.
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